A new bill has been proposed in Nigeria that mandates individuals involved in banking, insurance, stock-broking, and other financial services to provide a Tax Identification Number (TIN) as a prerequisite for opening new accounts or operating existing ones.
Titled “A Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States, and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters,” this legislation aims to enhance tax compliance and improve the country’s revenue collection process.
According to the bill, dated October 4, 2024, “A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall make the provision of a tax ID a precondition for opening a new account or operating an existing account.”
This requirement supports broader efforts to ensure that all individuals and entities engaged in financial activities register properly for tax purposes.
The bill also states that any non-resident person supplying taxable goods or services to individuals in Nigeria or earning income from the country must register for tax purposes and obtain a TIN.
However, non-resident individuals earning only passive income from investments in Nigeria do not need to register but must provide relevant information as required by the tax authority.
The proposed legislation grants the relevant tax authority the power to automatically register and issue a Tax Identification Number (TIN) to individuals who should apply for one but fail to do so.
In such cases, the tax authority must promptly notify the individual of their registration and the issuance of the TIN.
Failure to comply with these requirements may lead to administrative penalties. A taxable person who fails to register for tax will incur a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.
CREDIT: Allneeds, PUNCH
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